Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/11/2013

Brazil - Financial operations tax is 0% for certain investments 

June 11: A decree reduces to 0% the rate of the “tax on financial operations” (Imposto sobre Operações Financeiras—IOF) for investments made with respect to Brazil’s futures and commodities markets and financial and capital markets.

Decree 8023 (4 June 2013) reduces the IOF rate to 0% for certain investments—specifically investments in government securities and fixed income securities (previously, the IOF rate on these investments was 6%).

Background

IOF is a federal tax levied on credit, currency exchange, insurance and securities transactions executed through financial institutions—and includes intercompany loans. The tax also applies to gold transactions.


The rates of IOF can be increased / reduced by Brazil’s federal government by decree, with such changes being effective immediately. The tax base varies depending on the taxable event and the financial nature of the transaction.


Read a June 2013 report (Portuguese) prepared by the KPMG member firm in Brazil: 0% IOF no ingresso de recursos para aplicação no mercado financeiro




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